Tony Blair's strategy on genetically-modified foods is in crisis after
a series of extraordinary attacks by Whitehall's own communications arm
and a panel of independent advisers.

The Prime Minister had hoped a national debate on GM crops would soothe
widespread anxieties over their safety, paving the way for their commercialisation
in the UK.

But The Observer has learnt that this process is on the brink of collapse,
making it almost impossible for the Government to allay public suspicion
about the technology.

Documents reveal the government body charged with promoting the project,
the Central Office of Information, has warned that Ministers have failed
to stump up sufficient funds for the debate.

Environment Secretary Margaret Beckett was only prepared to give £250,000
- much less than the £1 million thought to be necessary.

The COI, which runs Whitehall's public relations, also fears the debate
is in danger of ending up as a meaningless exercise that could further
undermine confidence in GM foods. It has urged Ministers to come clean
on how the debate will actually influence GM policy amid growing suspicion
it is merely a propaganda tool.

The unprecedented attack by the COI is echoed by a group of 11 independent
advisers to the debate.

The advisory panel - which includes some of the UK's leading academics
- believes the debate is now so flawed that Blair risks 'outright hostility
and rejection' to GM.

If the much-trumpeted GM public debate is scrapped or goes ahead amid
such reservations it would make it highly embarrassing for Blair to sanction
the growing of GM crops in the UK. At a meeting last Thursday some
advisers said the Government should consider scrapping the debate entirely.

Alan Irwin, Professor of Sociol ogy at Brunel University, said: 'What
message is this sending out? That Britain is incapable of organising a
GM debate.'

Next summer the Government will decide on the commercialisation of the
technology. Ministers have said they will take the results of the debate
into account before making a decision.

Yet Beckett is accused of attempting to rush through the debate before
the results of GM trials are known. She has asked for the debate's findings
to be delivered next June - a month before trials are completed.

'This inevitably looks like an attempt to curtail the influence of this
"public debate" on the Government's freedom to do what it has always appeared
to want to do, namely to accept commercialisation,' warns a report by the
advisers.

It also reveals that those in charge of structuring the debate have
come under pressure by the Government to make it merely an exercise in
information dissemination.

The COI yesterday confirmed that the £250,000 allocated was 'insufficient'
to deliver a major national debate. The Netherlands spent 10 times that
amount on their GM debate while a debate in New Zealand cost £2m.

Scrutiny is also mounting on the timescale of the debate: New Zealand's
lasted 14 months. Experts expect a serious debate in the UK would last
between two and three months. Because of the June deadline, it would need
to start at the latest in February.

Irwin said: 'We are in November and given the range of issues that still
need to be sorted it is unclear how we are going to go from here. Too many
questions remain unanswered.'

Environmentalists said the issue was symptomatic of the Government's
'arrogance' over biotechnology. Doug Parr of Greenpeace said: 'They have
to have a proper, well-financed debate and give people the option to say
"no" to GM foods.'

Britain has struck a secret deal worth GBP1 billion to sell arms to
Thailand in return for promoting food that has been linked to cancer-causing
chemicals.

The deal, which was last night condemned as 'disgraceful' by opposition
MPs and farmers, involves Britain selling guns, Hawk jets, riot control
equipment and secondhand frigates from the Royal Navy to Thailand.

In return, Britain has agreed to provide financial help to Thailand
to develop its farming industry and promote Thai food products in this
country and abroad.

The deal was conceived in May, when the Thai prime minister, Thaksin
Shinawatra, visited the UK and met Defence Minister Geoff Hoon and Trade
Minister Patricia Hewitt. Hewitt also agreed to help Thailand overturn
the European Union ban on the import of Thai chickens.

The ban was introduced after it was discovered that the poultry contained
cancer-causing chemicals after farmers had been using illegal veterinary
drugs.

The agreement on the highly controversial arms deal was formally signed
last month by the British ambassador in Bangkok.

Opposition MPs last night claimed the deal has strong echoes of the
arms-for-aid scandals that plagued the Tories and were supposedly outlawed
by the Labour government.

The Liberal Democrats have demanded full details of the agreement, questioning
what taxpayers' money is being used to support the deal and whether it
is compatible with EU free trade policy.

Vince Cable, Lib Dem trade and industry spokesman, who last night wrote
to Hewitt, said: 'This is a deeply depressing and disgraceful deal. Linking
arms sales with food production gives a whole new meaning to the phrase
"swords to ploughshares".

'If the DTI is to promote actively the import of Thai food goods for
the sole benefit of BAe Systems, then the Labour government has sunk
to a new low in its arms trade policies.'

A spokesman for the Campaign Against the Arms Trade said: 'Not only
is this another example of pushing weapons sales on the developing world
but to tie it with food production is outrageous and morally unacceptable.
It's simply an arms-for-aid scandal in another guise.'

The farming community has also reacted with anger at the deal which
it claims threatens jobs.

Ian Johnson, for the National Farmers Union in the South West, said:
'Aside from the moral question, it's extraordinary that the Government
which appears to have abandoned British farmers seems to be doing all it
can to help farmers in the Third World who will end up exporting cheaper
- and some would argue - inferior products into our markets.'

According to reports in the Thai press, under the pact the British government
would seek to increase imports of Thai farm produce and help
find new markets for Thai goods. In return the Thai government will buy
arms from British Aerospace, now known as BAe Systems.

The Department of Trade and Industry last night refused to comment on
the deal, but the Foreign Office defended it, saying it will modernise
Thai armed forces and help it combat terrorism, at the same time alleviating
poverty and improving its food production.

A Foreign Office spokesman denied it was an 'arms-for-aid' deal because
it would be BAe Systems investing in Thailand's agriculture sector and
not the British state. He said Britain would promote Thai food exports
to other parts of the world and not the UK.

A spokesman for BAe said the deal was in an 'embryonic stage' and was
a little 'unusual'. But he said it was similar to most major defence deals
in which the company agrees to invest in local industry, known as 'offsets'.

In 1997, International Development Secretary Clare Short announced she
was banning deals linking arms sales to aid, following the Pergau Dam scandal
in which the Conservative government gave Malaysia GBP300m to help build
a controversial dam in exchange for buying British arms. The High Court
ruled that former Foreign Secretary Douglas Hurd acted unlawfully in allowing
such a deal.